cost of capital


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Related to cost of capital: Cost of equity, Capital structure, Cost of debt
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Synonyms for cost of capital

the opportunity cost of the funds employed as the result of an investment decision

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References in periodicals archive ?
If stock exchange works to reduce the cost of capital, entrepreneurs will increasingly opt for financing through listing rather than banks.
You need to justify paying a premium for a stock by examining the ability of the company to generate positive returns on investment over its cost of capital.
2,3) Some commentators suggest that they are zero, (11,12) whereas others are ambivalent, but suggest that if there is a cost of capital, then it is as low as 3%.
In reviewing the cost of capital, the regulator said it examined the changes that had occurred since the parameter was last set in 2009.
Section two concerns the impact of insurance implementation on the cost of capital components with regard to both the cost and the volume perspective.
Based on the above reasoning, it is not difficult to show that the cost of capital enlarges or shrinks the pool of investors and the number of projects an economy can embark on, can be used as a criterion for choosing among potential funds sources and uses, and is recorded in the numerator when estimating the cash flows.
The purpose in the paper are three fold: to recommend a realistic model of valuation, to examine whether changes in payout policy affect the cost of capital, and to estimate the cost of capital in the income trust sector of the Canadian market.
1 Prepare a presentation for Williams regarding the concept of a firm's weighted average cost of capital (WACC).
Therefore, the probability of a positive NPV project cannot be close to 100%--even projects that earn their cost of capital are risky.
In other words, a manager accepts marginal investments that return less than the cost of capital to facilitate larger and more valuable future investments when earnings stochastically improve.
Global Banking News-1 December 2009-Morgan Stanley says cost of capital may rise in UAE(C)2009 ENPublishing - http://www.
The policy of supplementing owner's equity with borrowed money can only be supported when the return on investment (ROI) is sufficiently large and a bigger margin of income is available after meeting all fixed charges including cost of capital.
b) The discount rate currently adopted is the cost of capital.
That successful organizations invest to earn a rate of return in excess of their cost of capital is a fundamental issue that managers at all levels must integrate into their understanding, suggest Pratt (chairman and CEO of Shannon Pratt Valuations, Inc.
CVP analysis, like other managerial accounting techniques, ignores the cost of capital and treats it as if it were zero.